Corporate & Forensic Fraud Audits for Private Equity Funds - Federal Lawyer
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Corporate & Forensic Fraud Audits for Private Equity Funds

Experienced Corporate & Forensic Fraud Audits Team

Are you worried about the liability of investing in a company that may expose your fund and its managers to corporate fraud? If so, it is imperative that you retain a corporate & forensic fraud professional to conduct an audit of your proposed company before investing in it.

Federal agencies have recently taken a renewed interest in investigating private equity funds because of their substantial interest in portfolio companies and ability to manage them. In addition, identified frauds and financial crimes within your portfolio companies can expose your fund and its managers to liability.

A corporate & forensic fraud audit can be performed on companies you are considering infusing with capital or acquiring substantial interests before any investment action on your part is taken. This is important because you do not want to be stuck with a company that is subject to a federal investigation.

If you are concerned about safeguarding your reputation and limiting your exposure to federal liability, you need to arrange a corporate & forensic fraud audit on your proposed company investment.

At Oberheiden, P.C., our team of professionals can regularly assess the compliance of your proposed investments, including performing detailed corporate & forensic fraud audits.

We are skilled at identifying matters of concern that could impact you in the future, so you are able to make an informed decision about whether to invest in the company.

Do not wait to get this information. Protect your business, assets, and future. Call or contact us today for a free consultation.

Put our highly experienced team on your side

Dr. Nick Oberheiden
Dr. Nick Oberheiden



John W. Sellers
John W. Sellers

Former Senior Trial Attorney
U.S. Department of Justice

Local Counsel

Joanne Fine DeLena
Joanne Fine DeLena

Former Assistant U.S. Attorney

Local Counsel

Joe Brown
Joe Brown

Former U.S. Attorney & Former District Attorney

Local Trial & Defense Counsel

Amanda Marshall
Amanda Marshall

Former U.S. Attorney

Local Counsel

Aaron L. Wiley
Aaron L. Wiley

Former Federal Prosecutor

Local Counsel

Roger Bach
Roger Bach

Former Special Agent (OIG)

Michael Koslow
Michael Koslow

Former Supervisory Special Agent (FBI)

Chris Quick
Chris Quick

Former Special Agent (FBI & IRS-CI)

Kevin M. Sheridan
Kevin M. Sheridan

Former Special Agent (FBI)

Ray Yuen
Ray Yuen

Former Supervisory Special Agent (FBI)

Dennis A. Wichern
Dennis A. Wichern

Former Special Agent-in-Charge (DEA)

Corporate & Forensic Fraud Examples

Corporate & forensic fraud issues can easily permeate a company and affect all aspects of its governance and operations. Once a private equity fund acquires a substantial stake in this company, they may find themselves in the middle of a federal investigation down the road.

Below are some examples of corporate fraud:

  • Misrepresentations within the financial reporting process;
  • Asset misappropriation and misuse;
  • Embezzlement;
  • Bribery and corruption;
  • Ponzi and pyramid schemes; and
  • Extortion

The above list is only representative of the types of corporate frauds possible within corporations. It is important to be aware of these examples in order to understand the importance of acting to prevent unnecessary risks and liability.

Red flags or warning signs to note include companies that have poor upper management oversight; weak internal controls and governance; insufficient monitoring and recordkeeping; inadequate due diligence and risk assessment procedures; inconsistent or unusual financial transactions; etc.

What Is A Corporate & Forensic Fraud Audit?

A corporate & forensic fraud audit investigates the internal operations and activities of a company for possible fraud, embezzlement, bribery, corruption, or other financial crimes.

It also examines the company’s audit and accounting systems for fraud in the reporting, recordkeeping, and internal controls systems. The objective is to uncover instances of fraud so that private equity funds can make an informed decision about whether to invest capital in that company.

Companies that are filled with fraud and other types of financial crime are less attractive to private equity funds because they may expose the fund to federal liability, impair the funds’ reputation, and cost the fund significant sums of money to bring the company into compliance and rectify the fraud or financial crime.

In these instances, it may be better to avoid investments into such companies. This is why it is so critical to have these corporate & forensic audits performed before undertaking an extensive investment.

The Importance of Conducting an Audit Prior to Purchase

Private equity funds traditionally invest in businesses without arranging for full audits. But this can lead to dangerous consequences in the future for the fund and its managers.

As soon as the company becomes a part of the fund’s portfolio, the actions of the company reflect upon the fund. Further, federal agencies have been increasingly willing to both investigate and prosecute private equity funds for the frauds and financial crimes of their portfolio companies.

A corporate & forensic fraud audit would have revealed a trend of suspicious behavior and activities and enabled the fund to make an informed decision about its investment objectives.

These audits examine the company’s financial statements; interview company personnel; perform background checks on specified individuals; and conduct various additional forensic analyses to identify possible frauds and financial crimes within the company.

Our corporate & forensic audit professionals at Oberheiden, P.C. can help identify red flags in your proposed investment company; find concealed bribery and corruption violations; monitor the company for continued fraudulent schemes; determine potential future losses; and assist you with making an informed decision.

Private equity funds should understand how critical it is to have these audits performed in all circumstances—even where the company seems compliant and healthy in the first instance.

The Changing Regulatory Landscape for Private Equity Funds

As mentioned, the regulatory landscape of private equity funds has changed substantially. Funds are more heavily scrutinized due to their ability to control large sums of money in oftentimes multiple portfolio companies.

When a portfolio company is investigated for fraud, federal agencies will generally also investigate the fund—especially if there is reason to believe that the fund or its managers were involved in the fraud or were aware of it.

Because of this, private equity funds have found it both necessary and beneficial to invest more time and energy in assuring that the companies with which they invest are compliant with federal law.

Corporate & forensic fraud audits conducted by a team of corporation investigations professionals can help reveal whether a proposed investment company would be a good fit for your portfolio, is free from instances of fraud and crime, and is complaint with federal law.

Corporate & Forensic Fraud Audit Procedures that Oberheiden, P.C. Will Organize for You

Our firm offers high quality and thorough corporate & forensic fraud audits to private equity funds. To assist funds in making their investment decisions, we provide the following services as a part of our rigorous audits, as some prominent examples:

  • Identifying instances of personnel fraud;
  • Determining whether company assets were misappropriated and/or concealed;
  • Quantifying the extent of the company’s losses;
  • Identifying suspicious activities within the company’s transactions with third parties and foreign parties;
  • Examining cross-border transactions for indications of fraud, financial crime, or other corporate misconduct;
  • Analyzing the effectiveness of the company’s compliance policy and whistleblower program;
  • Gathering evidence regarding the company’s documents, records, and internal operations;
  • Assisting the fund in developing investment options that fit its objectives;
  • Evaluating the company’s code of ethics and code of conduct

As stated, the above list is compiles the most common audit procedures we perform. If you have a question about these audit procedures or another procedure, give us a call as soon as possible.

Need Advice with Corporate & Forensic Fraud Audits?

Private equity funds are successful ventures that invest into companies that have the potential for significant growth. These funds often obtain a substantial ownership interest in the company or a seat on the board of directors or upper management.

However, funds have two problems to deal with. First, federal agencies have turned their investigative focus towards private equity funds due to their ability to control and manage companies by investing incredible sums of money.

Second, certain portfolio companies that contain instances of internal fraud or other financial crime can have a negative effect on the fund itself by exposing the fund to federal liability and impairing its reputation.

It is therefore critical to ensure that you arrange for a detailed corporate & forensic fraud audit of all companies with which you seek to invest. These precautions are necessary and vital to prevent your fund and its managers from becoming the subject of a federal government investigation.

At Oberheiden, P.C., our corporate & forensic fraud team of professionals can arrange for a through audit of companies before you make your decision to invest. This has the ability of allowing you to make informed decisions.

Protect yourself from federal liability by ensuring that all your investments pass a high standard of a professional audit for corporate & forensic fraud by the professionals at Oberheiden, P.C.

Call or contact us immediately to protect your assets and business.

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